As consumer data becomes more readily available, a host of new opportunities have opened up for retailers that want to tap into shopper data.
Personalization is a versatile tool. For marketers, it means being able to better target sales offers and advertisements using data about a customer's previous purchases and search history to inform what they might be looking for next. For retailers, it can mean everything from offering curated product recommendations to tailoring stores to a specific demographic.
For the shopper, personalization is something different. It's the feeling that a product was made specifically for them or the sense that a brand knows them well enough as an individual to send along only the most relevant products and offers. The relationship between shopper and retailer becomes much more like a conversation between friends — at least that's the idea.
Retailers fight customer churn with loyalty programs
Two-thirds of retailers offer loyalty programs, Salesforce found. Rewards play a powerful role in retaining customers, especially as prices rise.
By: Kristen Doerer• Published April 2, 2025
Retailers are fighting customer churn with loyalty programs, according to recent research.
Two-thirds of retailers offer loyalty programs, according to a Salesforce survey of 8,350 shoppers and 1,700 retail industry decision-makers. Another 29% plan to roll out loyalty programs in the next 24 months.
On top of that, over three-quarters of customers belong to a loyalty program, and the average shopper belongs to four. Points-based programs are the most popular model, offered by 57% of retailers. One-third offer cash-back models, and one-quarter offer tiered programs.
And high prices are driving brand switching, with two-thirds of shoppers changing brands in the past year alone due to price, according to Salesforce.
Businesses can only keep prices so low for so long to encourage returning customers before they have to raise them. As prices rise, more retailers are looking to rewards programs to encourage loyalty.
While price was the top reason for decreasing brand loyalty, 40% of consumers also pointed to poor customer experiences and inconsistent quality for their defection.
“When pricing's done all the heavy work that it can do because of inflation … how do you think about the consumer experience either in the physical environment or in the digital environment that consumers interact with has to play a more important role,” Rob Holston, EY global and Americas consumer products sector leader, told CX Dive.
Loyalty programs are one tool. Four in five members — 84% — say such programs make them more likely to repurchase. Among consumers, points are the most popular draw to a program, followed by points to a partner brand, free shipping or delivery, and free or discounted services.
But not every loyalty program is effective. Over one-third of shoppers belong to a loyalty program they’ve never used.
Article top image credit: Courtesy of Starbucks
Amazon taps AI for automatic product recommendations
The e-commerce giant gave a subset of U.S. users a tool that takes shopping prompts to routinely recommend items.
By: Xanayra Marin-Lopez• Published April 2, 2025
Amazon is leaning into artificial intelligence to provide product recommendations to customers.
The e-commerce giant added an Interests feature to a small subset of U.S. app and mobile users. Shoppers can enter custom prompts into the AI-based tool to find products for their passions and hobbies.
Users can use everyday language to set various preferences, such as price limits. The tool then scans Amazon’s store and notifies shoppers of relevant products, available items, restocks and deals. Customers who have access to the Interests feature can find it under the “Me” tab in Amazon’s app.
Amazon’s latest AI tool offers another layer of customer support in the shopping journey. To help customers find exactly what they need, Interests introduces new products to users faster by constantly checking Amazon’s inventory. Interests’ prompts and the products the tool finds auto-saves to the platform with updates once new, related items are found.
Amazon offered the example of the prompt “travel-friendly skincare products from premium brands.” The tool turns “premium brands” into specific items from the skin care category to gather relevant product recommendations. Customers can continuously update their prompt and create multiple for different search needs.
Amazon is regularly continuing to deploy AI to make its devices and shopping tools smarter. Amazon previously upgraded its personal assistant tool to Alexa+ with generative AI. The device is programmed to complete more consumer-facing tasks with automation. Amazon also curated shopping guides with AI for customers to help with the search experience.
Article top image credit: Courtesy of Amazon
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Email power: 2019 Email and mobile benchmark highlights
Marketers have been asking this and other metrics-related questions for years. And as people keep trying to improve their marketing programs, benchmarking your brand’s performance is only becoming more crucial.
With this in mind, Acoustic is excited to share the findings of our 2019 Marketing Benchmark Report. It examines email and mobile marketing messages sent by thousands of brands in 2018 to share industry standards on customer engagement, delivery, device and email client type, and subscriber churn. All of this data helps marketers understand how their programs stack up to competitors and the report’s analysis and tips provide insights to help improve performance and results. (You can actually see how your own metrics compare to top performers in our interactive tool.) So let’s dig into a few of this year’s highlights.
Slicing through the data
Open rates and click-through rates continue to grow: Since 2014, open rates and click-through rates (CTRs) have increased steadily each year — with the biggest jump in 2018. Open rates rose to 24% in 2018 from 21% in 2014, a 14% increase. And click-through rates increased 19% to 3.8% in 2018 from 3.2% in 2014.
This steady rise is likely a combination of two factors: one, brands are focusing more on list hygiene and high-quality subscribers, and two, messages are more relevant due to the increased use of behavior- and preference-based personalization and journeys.
Privacy regulations such as GDPR and CASL (Canada’s Anti-Spam Legislation) that limit how data can be used and shared are rapidly changing the marketing landscape, forcing brands to find new ways to drive loyalty without jeopardizing the privacy of consumers. Because of these and other current and planned regulations, many brands are greatly increasing their focus on list hygiene, permission practices, and quality over quantity. As a result, with the denominator number in metrics improving (list quality), open and CTR metrics are rising and are likely will continue.
Auto races to the top of click-through rates: This is the first year we have metrics for the Automotive industry, and the results were impressive. Emails sent by auto brands clearly click with recipients with a mean of 10%, far above the second highest industry, Computer Hardware and Telecommunications, which has 7.3%. Lowest performing industries include Hospitals, Healthcare & Biotech, Industrial Manufacturing & Services, and Retail & Ecommerce all at 3.0% and Nonprofits, Associations & Government with a mean of 2.8%.
So why are auto brands on top? They tend to send emails infrequently, but when they do, current owners and shoppers often click on recommended service information or browse a new model of interest. So lower frequency and high consumer interest and relevance are driving high CTRs.
Mobile email engagement declines: The percentage of consumers opening emails on mobile devices dropped to about 44% in 2018 from 49% in 2017, likely because modern consumers use mobile devices primarily for inbox maintenance.
Comparatively, the average percentage of consumers opening webmail (such as Gmail or Yahoo) increased to 40% from 33%. As consumers increasingly use mobile for general inbox maintenance, they can more quickly identify and delete messages.
Transactional messages are top performers: Emails that are triggered by a customer’s behavior have average (mean) open rates 20 percentage points higher than non-transactional emails such as promotional offers or newsletters. Transactional messages sent in 2018 had a mean open rate of 47.6% versus 23.8% for non-transactional messages.
Transactional emails have always performed well because of their relevance and timing. Unfortunately, many marketing organizations neither own these messages nor are optimizing their design, content, and opportunities to cross- or up-sell customers or educate new buyers leading to greater customer experiences.
Mobile App Inbox Messages Outperform Push Notifications: Consumers open simple mobile push notifications about 5% of the time while mobile app inbox messages see average (mean) open rates of more than 22%. Push notification content — such as a flight delay, package shipping status, or breaking news — often doesn’t require further action from the recipient. Mobile app inbox messages, however, present a significant opportunity to create an email or web-like HTML experience for customers within the app inbox.
The data in the latest Acoustic Marketing Benchmark Report shows that email and mobile marketing continue to not only thrive but that marketers can expect to see improved results from these channels. See how you stack up by downloading our report.
Few consumers trust retailers to use their data responsibly, research finds
Consumers are more willing to share data when the requests are personalized and the experience is more rewarding, Press Ganey Forsta found.
By: Bryan Wassel• Published July 1, 2025
Retailers that want customers to trust them with personal data need to offer shoppers both value and transparency in return.
Just 1 in 5 U.S. consumers trust retailers to use their data responsibly, according to a Press Ganey Forsta survey of 2,000 people. However, more than two-thirds of U.S. consumers say they are willing to share their data if it results in more personalized and rewarding customer experiences. Fewer than one-third say they would consider switching retailers for a more personalized experience.
Not all demographics feel the same about their data. Nearly 2 in 5 Baby Boomers say that personalization either doesn’t matter to them or that they would never share their data with retailers under any circumstances.
As a baseline, retailers need to make sure that any data sharing is a trade-off worth the potential downsides, according to Rebecca Becker, vice president of retail experience solutions at Forsta. A combination of experience and communication is key to earning trust.
“Today’s consumers are highly selective about the data they share – not because they don’t want personalised experiences, but because they want assurance it’s being used responsibly,” Becker said in an email. “Clear communication, secure systems and immediate benefits like personalized discounts, early access and convenience features all play a role.”
Retailers should also make sure customers know their data is enabling these benefits, according to Julie Geller, principal research director at Info-Tech Research Group. Consumers are more willing to share if they know how their input will lead to better experiences.
“Retailers need to move beyond viewing data collection as a compliance checkbox or a one-sided request for information,” Geller said in an email. “Both transparency and consent are critical, but what sets leading brands apart is how they design data-sharing moments as part of a mutual value exchange.”
Data sharing and trust building are each part of an ongoing relationship between customers and retailers, according to Geller. The most effective companies combine first-party signals with zero-party inputs, like style quizzes or delivery preferences, to show the customer that they are actively listening and adapting to their needs.
While security breaches harm trust, the damage isn’t irreparable, according to Becker. Rebuilding trust can be a matter of offering great experiences that put the customer first and continue to prove that their data is making their shopping experiences better.
“Retailers need to prove this value by offering tailored offers, loyalty rewards, and seamless service across digital and physical channels,” Becker said. “Repairing trust isn’t just about better tech, it’s about showing customers they’re seen and valued as individuals.”
Article top image credit: grinvalds via Getty Images
The core objective of Lowe’s loyalty program? Drive one more trip
The retailer’s dual loyalty programs focus on driving frequency by meeting customers’ needs at every stage of their journey.
By: Bryan Wassel• Published June 26, 2025
A good loyalty program encourages shoppers to come back time and again. However, not all businesses operate on the same customer frequency — and sometimes different audiences can visit the same company for different reasons.
Lowe’s dual loyalty programs for homeowners and professional contractors are centered around driving more trips — based on how much those cohorts already shop with the home improvement retailer, according to Amanda Bailey, vice president of customer marketing and loyalty at Lowe’s, who spoke during a session hosted by sister publication CX Dive for the Loyalty 2.0 webinar.
The retailer wants its pro loyalty customers to visit Lowe’s at least 10 to 20 times more than they might in a given year, according to Bailey. In contrast, many homeowners only ever use Lowe’s once or twice — so driving a couple more visits with its loyalty program could have a very large impact on the business.
“Loyalty is a long game, and so just be really focused on, ‘What is your core objective?’” Bailey said during the session. “And for us, that's around frequency. It keeps us really centered and allows us to keep thinking about what's going to keep them coming back, trip after trip, year over year.”
The key is to look at loyalty as more than a transactional set of rewards or a marketing program, according to Bailey. A loyalty program should be designed around the customer and take their needs into account from sign-up to any potential future shopping trips.
Simplicity starts at sign-up
Confusion is one of the top reasons that people disengage from loyalty programs, according to Bailey. If it’s hard to earn rewards, it doesn’t feel worth the effort to try.
“I'm probably part of about 20 different loyalty programs, and we know the ones that we use the most,” Bailey said. “They're the ones that are part of our everyday life. They're easy to use. They give you value. And it doesn't take a lot of energy and effort to make you feel engaged.”
For Lowe’s, that meant allowing customers to access all their loyalty benefits just by providing their phone number, according to Bailey.
The need for simplicity starts from enrollment, according to Bailey. This doesn’t just mean easy sign-up — it also means a tiered program can’t make customers work to earn their initial benefits.
“When people join loyalty programs, sometimes there's this belief that you're at the bottom of the mountain staring up, and you're like, ‘I'll never get there,’” Bailey said.
MyLowe’s Rewards aims to overcome this pitfall by offering all of its benefits to its lowest-tier members. Customers at the two higher tiers can earn rewards faster or with fewer restrictions, but everyone gets access to the same set of perks, including earning points and free shipping options.
Instant value and gratification are at the core of the homeowner MyLowe’s Rewards program and the pro MyLowe’s Pro Rewards program because complexity is a barrier to entry, according to Bailey.
“Simplicity drives a habit, and going back to what is our core metric, it's about driving frequency,” Bailey said. “Well, we want to create a habit for our customers to think about Lowe's as the most helpful brand and home improvement.”
Loyalty goes beyond the program
Lowe’s loyalty efforts stretch beyond the transactional value of MyLowe’s, like earning points, to build relationships with customers no matter where or how they shop, according to Bailey.
The retailer integrates loyalty into every touch point of its in-store and online experiences, including before and after purchases, according to Bailey. Lowe’s looks beyond the value the loyalty program provides through points and deals and thinks about loyalty in terms of how and why customers shop.
“It's part of our total home strategy,” Bailey said. “It functions not just as an entry point into the business and into a relationship with us, but as this ongoing kind of relationship builder where we can create value based on who you are and what you need in a more personalized and relevant way.”
The integration of loyalty in Lowe’s reaches all the way to the home improvement retailer’s employees, who automatically receive Silver Key membership, putting them in the second tier of the homeowner loyalty program.
“When we rolled out MyLowe's Rewards last year, we knew it's really important to build advocates ... through our red vest associates,” Bailey said.
Bringing employees into the program gets them excited about MyLowe’s Rewards, according to Bailey. As a result, employees are more likely to tell customers about the program and be prepared to explain the benefits.
Article top image credit: Scott Olson / Staff via Getty Images
Etsy is leveraging AI to boost personalization
In its latest earnings call, the marketplace said personalized homepages yielded nearly double the engagement compared to those without personalization.
By: Xanayra Marin-Lopez• Published May 1, 2025
Etsy is going all in with AI integration across its platform.
The company is tapping AI for push notifications, emails and personalized homepages, executives told analysts in a first-quarter earnings call.
Engagement nearly doubled upon adding personalized homepages, CEO Josh Silverman said on the call. The company also tested using generative AI to create personalized marketing copy during the quarter. In Q1, buyer conversion rate on Etsy's app increased year over year, Silverman said. The company saw an upward year-over-year trend in monthly active users and increases in app downloads for first-time users.
As the company continues to update its language learning models to create more personalized experiences, it’s incorporating ad and recommendation data to tailor engagement and retention.
“We believe these efforts are beginning to fuel a stronger customer relationship flywheel, powered by new experiences that capture more and better data, which feeds advanced artificial intelligence and machine learning to deliver deeper personalization to drive buyer engagement and frequency over time,” Silverman said on the call.
For the first quarter, Etsy reported consolidated revenue of $651.2 million, up 0.8% year over year. However, gross merchandise sales across the Etsy marketplace dropped nearly 9% year over year to $2.3 billion, and active buyers fell 3.4% to 88.5 million.
Etsy is working with third-party AI-based shopping platforms in an effort to build on its in-house AI success. The company is participating in a research preview of OpenAI’s Operator, an AI agent created to conduct web-based tasks, such as ordering a personalized mug, on behalf of users. Etsy also enabled in-app purchases for Microsoft's AI assistant Copilot.
Silverman said Etsy is just getting started with creating personalized browsing and discovery journeys. Using AI, Etsy is working to build a customer experience where the first trends and items a user sees is based on their activity. Data on purchased and viewed items is used to create what appears highest in a curated collection.
Etsy has continuously been using AI to improve consumer-facing elements of its marketplace. Chief Product Officer Nick Daniel told Retail Dive the company has used AI to help create alt text for images, summarize product reviews and enhance accessibility and SEO. The company can also better estimate delivery dates with AI.
Article top image credit: Courtesy of Etsy
Wayfair launches paid loyalty program
For $29 a year, the online retailer is offering customers free shipping, early access to major sales events and 5% back in rewards on purchases.
The program costs $29 per year with rewards that never expire as long as subscriptions do not lapse, according to a company press release. Members get 5% back in rewards on all purchases, early access to major sales events and free shipping on orders of any size, among other perks.
Loyalty programs can influence customer spending. Most consumers will join a loyalty program before making their first purchase, according to a Snappy survey. And 75% of customers will spend more money as a member, per the report.
In its own research, Wayfair found that many of their customers were members of multiple loyalty programs with other brandsand were often frustrated by slow earn rates and restrictive expirations that took control out of their hands, per a company spokesperson for the brand.
"We designed Wayfair Rewards to deliver extraordinary value to our customers with meaningful perks that can be felt immediately," Wayfair Chief Commercial Officer Jon Blotner said in a statement. "Whether you're embarking on a remodel or just looking for a new throw pillow or kitchen gadget, our diverse catalog combined with our new rewards program ensures members get exceptional savings every time you shop with us."
Wayfair Rewards replaces the retailer’s existing credit card rewards program. A previous loyalty program from Wayfair, MyWay, ended in 2020, per the company.
An array of loyalty programs are on the rise as a way to regularly reward customers for shopping for specific brands. Apparel brand Kith offers members-only merchandise as an incentive to join. J.C. Penney, meanwhile, recently launched a new program that allows members, who join for free, to accrue points and rewards faster than previous programs.
Brands like Ulta Beauty and Foot Locker have sought to refresh and update their programs. The beauty retailer last year announced a relaunch of its loyalty program, including an enhanced birthday offering that allows customers to select a gift from a portfolio of brands across categories. And Foot Locker, as part of its turnaround, introduced an updated loyalty program that allows customers to redeem points for discounts.
As the home category slowed, Wayfair ushered in cost-cutting measures. The company laid off around 1,650 employees, representing about 19% of its corporate team and 13% of its global workforce.
Wayfair has stepped up its strategy of opening brick-and-mortar stores as a way to meet customers where they shop. After experimenting with pop-ups and small-format stores, the company has opened brick-and-mortar locations for its brands, including AllModern, Joss & Main and Wayfair.
Consumers are buying more from generative AI’s suggestions: Adobe
A report highlighted that using generative AI tools for shopping leads customers to more purchases in electronics and jewelry.
By: Xanayra Marin-Lopez• Published March 27, 2025
Consumers are buying more from generative AI's suggestions.
Compared to July 2024, traffic from generative AI sources increased by 1,200% in February 2025, according to research from Adobe. Electronics and jewelry boasted the highest conversion rates, Adobe found in its report, which surveyed 5,000 U.S. consumers. The lowest lies in apparel, home goods and grocery categories. Generative AI traffic has doubled every two months since last September.
While shopping, consumers are using generative AI to conduct research, receive product recommendations and deals, Adobe found. Respondents also reported they use the tool for getting present ideas, finding unique products and creating shopping lists.
Almost 2 in 5 respondents say they’ve used generative AI for online shopping, while just over half say they plan to do so this year, Adobe found
“Online shoppers are seeing benefits in using an AI-powered chat interface, as it shortens the time it takes for them to receive information that is personalized to their needs,” Vivek Pandya, lead analyst at Adobe Digital Insights said in a statement. “This is reshaping how businesses think about customer engagement, especially with the arrival of AI agents that will be able to handle more complex tasks and make highly tailored recommendations.”
Most respondents, more than 9 in 10, said using AI when shopping enhanced their experience, Pandya noted. Additionally, 87% say they’re more likely to use AI for larger or more complex purchases.
Adobe previouslyfound nearly 3 in 5 respondents reported that generative AI already improved their online shopping experience. Over time, the generative AI customer experience has grown to be more useful and satisfying to customers.
Generative AI tools are drawing shoppers away from traditional search engines, Capgemini recently found. Shoppers also want the tech to aggregate results from online search engines, social media platforms and retailers’ websites.
Article top image credit: gradyreese via Getty Images
CEOs say personalization is the key to success in music retail
The leaders of two of America’s top musical instrument retailers, Guitar Center and Sweetwater, say guiding customers through product discovery is key to sustaining sales momentum.
By: Nate Delesline III• Published Nov. 11, 2024
Guitar Center and Sweetwater, two of America’s major music gear retailers, are striking slightly different chords with how they plan to maintain and grow their market share, customer loyalty and engagement in a specialty industry that includes newbies, hobbyists, influencers and full-time professionals.
Guitar Center operated 303 locations as of late 2024. The California-based company also operates about 250 stores under the Music & Arts banner. Those stores focus on school band and orchestra product sales and services.
Sweetwater, in contrast, is almost exclusively an e-commerce business, operating just one flagship physical store at its corporate headquarters in Indiana with no current plans to expand its brick and mortar presence.
Sweetwater’s retail store in Indiana
Permission granted by Sweetwater
“Generally and generationally, I think there's just a momentum towards online shopping,” Sweetwater CEO Mike Clem said in an interview with Retail Dive. “Every category is seeing this increase in digital penetration.” Clem also said the pandemic reshaped expectations around online shopping.
With no other option during the height of the pandemic, many people decided to give online shopping a try. Clem said Sweetwater gained 2.5 million new customers during the pandemic and customer retention has remained strong.
Neil Saunders, managing director of GlobalData, said it is somewhat surprising that consumers seem increasingly comfortable making online purchases for musical gear because it’s often a deeply personal discretionary buy for a hands-on product.
“However, a distinction needs to be drawn between generalist purchases for those dabbling in music and more specialist purchases for those more involved in making music,” Saunders said in emailed comments to Retail Dive. “The latter will often have tested instruments at specialist retailers or during the course of their work, so they do try things out before buying. The former are quite content using Amazon or a non-specialist and making decisions by reading reviews and watching things like online videos.”
The bankruptcy and closureof Sam Ash Music also means there’s one fewer major player in music retail’s brick-and-mortar sector.As the New York-based music retailer celebrated 100 years in business, it closed its 42 stores. Among other issues, the company said in court documents that it was too dependent on in-store traffic.
However, the Sam Ash brand name will continue on. Gonher Music, a Mexican-based company, won a bankruptcy auction to buy most of the company’s assets, including its e-commerce operation for $15.2 million. But a representative told Retail Dive that it has no plans to reopen physical stores and that its strategy will be focused on e-commerce.
“It's a sad story,” Clem said regarding Sam Ash’s closure. “We knew the Ash family well. Sam Ash was one of the most respected and iconic names in our industry. And even personally, you know, as a young musician, as a kid, I remember going into those stores and falling in love.”
News of Sam Ash’s closure drew an outpouring of lament online from customers and current and former employees. For musicians, all music stores,with their gleaming rows of instruments, impromptu jam sessions, music lessons and a regular clientele of local and renowned performers are more than just a place of business. They’re often a third place where people come to connect, learn and celebrate.
The company later announced the opening of Sam Ash Direct, which it described as an "online music and sound megastore." In a message to customers, the company said it would offer "a seamless online shopping experience" featuring gear from top brands. The company also touted the debut of "gear experts" who are available to provide personalized guidance for purchasing decisions via phone or live chat.
Sam Ash’s loss could be Guitar Center’s gain, as the company confirmed it’s considering expanding the national footprint of its physical stores, CEO Gabe Dalporto told Retail Dive in a statement. “We do see opportunity to expand, and we’ve currently got a couple in the pipeline for the next year. However, the order of operations for us is to build and create a powerful customer experience in our existing fleet before we make significant expansions.”
However, pushing to grow its physical store presence might not be the best or only approach to position Guitar Center top industry and top of mind for consumers, according to Clayton Durant, founder of CAD Management and an adjunct professor of music business at Long Island University’s Roc Nation School of Music, Sports & Entertainment.
“Instead, the focus should be on enhancing their current retail presence to create a best-in-class, in-person customer experience for their core customer, which, according to their CEO, Gabe Dalporto, is the ‘serious musician,’ someone for whom music is a key part of their identity,” Durant said.
The company can do that, Durant said, by focusing on three areas. Guitar Center should leverage emerging technologies to elevate the shopping and equipment testing experience, invest in developing and training in-store staff, and reimagine store layouts to enable customers to discover and experience products “in the most engaging way possible to create a meaningful connection between the customer and the equipment or instrument they are considering purchasing.”
Durant said those initiatives are already taking shape under Dalporto’s leadership. He cited Guitar Center’s recent additions to the leadership team, including the hiring of Adolfo Rodriguez as chief technology and information officer. And Michael Martin joined the company as executive vice president of retail sales and operations.
“It is clear [Dalpoto] is gearing his leadership team up to mirror strategies from successful retail leaders like Walmart, which have excelled in integrating technology, customer service, and product experience to create a cohesive one of a kind retail environment,” Durant said.
But buying from Guitar Center offers two things that retail giants like Walmart or Amazon don’t.
“The first is ‘Sometimes I just want to go to Disneyland.” By this, they mean Guitar Center is ‘Disneyland for musicians.’ They want to come in and have a blast trying and playing cool new instruments. It’s like Space Mountain, but better,” Dalporto said.
“The second thing they say is ‘this is a big investment and I want to talk with someone who knows their stuff before I buy.’ So, we must have deeply trained product experts to help them make the right choice,” Dalporto said. “If we do those two things, we don’t need to worry about Amazon, because they don’t deliver these things.”
‘Mimicking that brick and mortar experience’
Although Sweetwater is primarily an e-commerce operation, the company goes the extra mile to offer great customer service and curated, personalized shopping experiences online, Clem said. For example, guitars over $299 get taken out of the box to receive a complete functional and cosmetic inspection. Each guitar is also captured with high-resolution photos.
That means as a customer is shopping online, they can choose not just a specific make and model of guitar but an exact serial number if a detail like the wood grain pattern of the instrument catches their eye. Sweetwater customers are also paired with one the company’s 600 sales consultants, who maintain an ongoing relationship with them throughout their journey with the company.
“So in a lot of ways, what we're doing is mimicking that brick and mortar experience where I feel like I got up close and personal with this instrument, and I have the confidence in the comfort of buying,” Clem said. “And quite frankly, you're going to receive a better quality instrument, factory fresh, where you know so many of those guitars in local stores have been played.”
At the same time, Clem said they recognize the value and joy of making an emotional, tangible connection with a product. “I think there’s opportunity in the future for brick and mortar to be very relevant, but I think it has to transform to some degree into these more experiential reasons that connect to other reasons to be in the store,” Clem said.
In previous years, Sweetwater did that through events like Gearfest at the company headquarters campus. The annual event typically drew nearly 20,000 people. The pandemic ended the in-person event, but it continued as a virtual expo. Although the previous iteration of GearFest didn’t return, Sweetwater is producing smaller events targeted at segments of the music community. This summer, the company hosted DrumFest, which Clem said drew about 2,000 people. It also hosted its inaugural GuitarFest this year. Both events featured performances, product deals, merchandise giveaways and opportunities to engage with brand representatives.
Sweetwater CEO Mike Clem admires the newly refreshed PRS 2024 Custom 2408 electric guitar model, with updated Tuning machines and pickups, showcased at Sweetwater’s first GuitarFest. The color is a limited run Purple Mist Wraparound Smokeburst. (Also pictured, Alex Chadwick, representative for PRS).
Permission granted by Sweetwater
Guitar Center is also pushing further into the experiential retail space.The company opened a studio in its flagship Hollywood, California, store. The company said its GC Pro Dolby Atmos Creation Studio is designed to showcase Dolby’s latest surround sound technology to artists, producers and content creators. The facility will also serve as a production studio for Guitar Center’s podcasts and artists interviews.
“This studio offers artists and engineers a space to experiment with groundbreaking technology, pushing the boundaries of creativity, and delivering next-level experiences to audiences worldwide,” Patrick Cloud, regional sales manager at Guitar Center Professional, said in a statement provided to Retail Dive.
A billion-dollar business
Guitar Center and Sweetwater are typically top of mind for professional or hobbyist musicians. However, Amazon and Walmart, through their primary sites and marketplaces, are siphoning off some customers through their offering of musical instruments and related accessories, like cords, guitar strings and stands, industry observers said.
Although individual pieces of high-end music gear can cost thousands — or even tens of thousands — of dollars in the big picture, music retail is “a relatively low penetration, low frequency sector,” Saunders said. “Not all consumers buy music products and those that do, don’t buy them very often. On top of this, the selection of products is vast and the volumes on individual SKUs is low. This makes it very difficult to balance the economics of running specialist chain stores in the sector.”
Saunders said GlobalData’s figures indicate that the sale of music-related consumer products was about $9.3 billion in 2023. By comparison, home goods was $1.1 trillion, apparel was $564 billion and electronics was $375.8 billion.
That’s not to say that music retail doesn’t move the needle when it comes to sales. Sweetwater is a billion dollar business, having first reached that sales threshold during the height of the pandemic in 2020. In early 2021, then-CEO and founder Chuck Surack told Rolling Stone the company was selling 1,000 guitars a day. The company added 2.5 million new customers during the pandemic and finished the year with revenue growth of 6%, according to Clem.
‘They have the ability to undercut the market’
However, Durant added, a typical customer shopping for music gear at Amazon, Walmart or Temu isn’t a core customer for Guitar Center, Sweetwater or Reverb. Rather, people who choose one of those retailers for music-related buying, Durant explained, “are often either new to the music creation process or simply hunting for the best deal. They may not be looking for the expertise and specialized service that dedicated music retailers provide.”
Launched in 2013, Etsy-owned Reverb describes itself as “the largest online marketplace dedicated to buying and selling new, used and vintage musical instruments.” The company is also trying to edge into the new and like-new product market, with the launch of Reverb Outlet. The company’s outlet marketplace features closeout products and open box items for at least 20% off with free shipping and a minimum seven-day return window.
Music Go Round also has some market share. The Winmark Corporation-owned brand franchises brick-and-mortar stores that specialize in used music gear. There were about 35 Music Go Round stores operating as of late 2024. Other brands in the Winmark portfolio include Plato’s Closet and Play It Again Sports.
“For companies like Guitar Center, Sweetwater, or any music retailer doing online business, it's crucial to stay mindful of how these big-box retailers can leverage their size and scale to offer products at highly competitive prices,” Durant said. “They have the ability to undercut the market by selling gear at a discount, which can be a challenge for specialized retailers.”
What that means, according to Durant, is that while Amazon, Walmart and Temu can draw customers in with price and shipping convenience, they can’t compete when it comes to the kind of service that many dedicated music gearheads and creators want or expect.
“This kind of personalized, ongoing support is a major differentiator in the music retail landscape and is why it is unlikely that any of these major retailers will ever become market leaders in music-related gear,” Durant said.
Article top image credit: The image by JeepersMedia is licensed under CC BY 2.0
Foot Locker’s new loyalty program lets shoppers redeem points for cash, sneaker access
A new mobile app will join the refreshed FLX Rewards program later this year as the athletics retailer undergoes a major turnaround effort.
“Kind of grounding in Mary's lace-up plan overall for the business is this fundamental idea of being more customer-led as an organization,” Chief Customer Officer Kim Waldmann said, noting that the retailer took an eye to its existing loyalty program through that lens. “What we found was, it was really engaging our sneakerhead-type consumer, who was excited about product heat and launches, but we had an opportunity to really democratize the program and provide value to more consumer segments.”
Key to doing that is the new FLX Cash benefit, which allows shoppers to redeem points for discounts of $5, $10 or $20. Members of the loyalty program earn 100 points for every dollar spent. Foot Locker also introduced free returns as part of the relaunch, in addition to the existing benefit of free shipping with no minimum order. Some of these more value-oriented perks appeal to the average consumer more than the sneakerhead, and lead to higher wallet share, according to Waldmann.
Already, the company is aiming for 50% loyalty penetration by 2026, and in the future, it hopes to hit 70%, per a company press release.
“What we have seen in the pilot is even if they're redeeming cash back, that means that they're spending more frequently and consolidating their share of wallet with us, and so ultimately, it's incremental,” Waldmann said.
She noted that a pilot of the loyalty program in Canada saw customers shopping with Foot Locker more often and buying more when they did. And although a key goal of the program is to bring in more of your average consumer, Foot Locker is also introducing features geared at its sneaker-loving fan base.
For example, another use of loyalty points is to cash them in for an extra shot at getting access to new sneaker drops. Similar to buying multiple raffle tickets, purchasing an “extra boost,” as Waldmann calls them, ups your chances of getting selected.
Foot Locker’s “heat monitor” will tell shoppers how hot a product drop is.
Courtesy of Foot Locker
“And that obviously matters a ton to get those Jordan Retro 4’s or whatever the high heat product at the moment is,” Waldmann said. “Some are really going to value that, and some are just going to value the ability to get rewarded financially for the more that they spend with us over time.”
The FLX program will also feature members-only sales events and one-off giveaways like the chance to win sneakers for a year.
When Foot Locker’s new mobile app launches later this year, it will be closely tied to the loyalty program, with a hub where shoppers can view points, rewards and scan their loyalty card in stores. The app will also include a “heat monitor” to tell shoppers how hot a product drop is likely to be — for example, just “hot” or “atomic.” The idea behind that is to give customers a sense of how many points they should put toward an upcoming drop, according to Waldmann.
A “Store Mode” feature will allow shoppers to scan products in a given Foot Locker store and see what the retailer has in their size. When asked if a store associate will still have to go retrieve those products for shoppers, Waldmann said they weren’t sharing that information yet.
Looking ahead, Foot Locker plans to invest in personalization based on the data it receives from the loyalty program. That could mean more targeted marketing to different consumer segments, as well as more data insights for brand partners, like Nike. Nikehas shown an interest in sharing data with its wholesale partners in the past, including by tying its loyalty program to Dick’s Sporting Goods in 2021 and launching a similar effort with Hibbett two years later.
When asked if that’s in the future for Foot Locker, Waldmann said Nike is “super excited” about Foot Locker’s loyalty program, “in terms of consumer engagement, but also the value that it brings back to them in terms of access and personalization. We're both very focused on getting this out the door and then we obviously always have conversations about what the future looks like and how we can integrate more deeply together.”
For Foot Locker, the loyalty program revamp and soon-to-drop mobile app represent another ticked box on a long list of turnaround priorities, and hopefully — a base to build upon next year.
“We're setting the foundation on all of these pillars this year,” Waldmann said, “and then we'll continue to build on them to deliver a great experience in the future.”
Article top image credit: Courtesy of Foot Locker, Inc.
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